After the success of Paranormal Activity, Paramount Studios plans to launch a division specifically for $100,000-or-less movie projects. Unfortunately, rather than getting innovative horror films to theaters, the movie house will use the department as an expensive focus group.

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The Los Angeles Times reports that starting in 2010 Paramount, which hasn't officially announced their plans, will use $2 million of its current budget to finance 20 "micro-budget" films a year. Sounds great, right? Well, almost.

There are a few hiccups in Paramount's plan. The studio won't spend any of its allocated money on completed films shown at festivals or markets. Rather they'll buy scripts from screenwriters and create these low-budget flicks in-house. We can only hope they'll still spend cash from other departments to buy festival finds — Paranormal Activity, after all, was a film shown at several festivals before it was picked up by Paramount.

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The other drag: Whatever films Paramount does make, may not actually make it to audiences. Instead, they'll act as pilots for new filmmakers who can gauge interest before then remaking the film with a bigger budget. Um, isn't the brilliance of low-budget horrors like Paranormal Activity and The Blair Witch Project that without the budget for expensive special effects, their screenwriters and directors were forced to come up with creative ways to convince their audiences that something horrifying was happening in front of their eyes?

Movies that do make the cut, and don't require a larger budget revision, will be digitally uploaded to a limited number of theaters. "Some of the micro-budgeted movies could be released in just a handful of midnight screenings to gauge audience interest before a wider (and costlier) national release," the LA Times writes.

Here's an idea. Ditch the theater screening and team up with Netflix or iTunes to release your films there. If you get a significant number of streams, then release it in theaters. Heck, do this with all the films completed under the division. Your pilots can be seen by the largest and most diverse focus group there is, the world wide web. The future of film is all about crowd-sourcing.